Magazine

The Accidental Ad Agency

September 03, 2006

Flavorpill is additional proof that you can build a Web media company from an e-mail. Yes, just like online classifieds juggernaut craigslist, whose genesis was an e-mailed list of parties in San Francisco. And DailyCandy, which now directs style-savvy young women in 10 cities to all manner of boutiques and services, and, which, earlier this year, projected 60%-plus profit margins on revenues of $18.8 million in 2006.

Flavorpill was once a list of cultural events that co-founders Sascha Lewis and Mark Mangan sent out to a few pals in New York. It's now an e-mail that goes out to a few hundred thousand subscribers in four U.S. cities and London. It owns five other Web properties, including music site Earplug and art site Artkrush. What DailyCandy is to fashion, Flavorpill is to the subset of urban culture -- DJ appearances, gallery openings, film revivals -- often tagged as "downtown." It's a cultural signifier that the recorded voice greeting callers to Flavorpill's Manhattan offices is breathy, British, female, and young, as it is at another New York-based hipster media play, Vice.

Flavorpill employs just 10 full-time. Revenues this year, insiders say, will be around $3.5 million. Like other smallish players in this space, it's becoming adept out of necessity at building bridges between its sensibilities and those of big mainstream advertisers. For Anheuser-Busch's (BUD) Budweiser Select brand, Flavorpill chose 10 artists to design ads for its own Web sites. But the beer baron ended up liking these ads so much that it ran them in music magazine The Fader. And once Web visitors vote on their favorites later this year, one artist's ads will appear in an multi-city outdoor campaign next year. Thus a small media company started out selling its audience and cool quotient, which is old news, but ended up designing ads that will run more widely, which is new. Flavorpill's moves describe a fresh reality of marketing: The line between which entity creates media and which creates advertising is suddenly and strangely malleable.

IT IS, OF COURSE, very Old Media of me to try to slot Flavorpill exclusively into a category marked "media company" or "creative agency." "One of the goals," says Lewis, is "to create as close as possible a seamless relationship between the media partner, aka the advertiser, and our content and our product." The Web "has created a [more] collaborative effort between the media vehicle and the creative content...than any medium in the past," says Tony Ponturo, vice-president of global media and sports marketing for Anheuser-Busch. He confirms that Anheuser-Busch expects to double its online spending next year, to around 10% of its ad budget. (Not that the Flavorpill deal will eat up much of it. What the companies call Select Flavor adds up to under $1 million, or a rounding error for Anheuser-Busch, which in 2005 shelled out $785 million in media spending.)

Select Flavor's ads, up at www.flavorpill.net/select, are augmented by the "product seeding" among the urban cool set that's de rigueur for such deals these days. (In July, Flavorpill put on a party in New York celebrating the publication of Chris Anderson's book, The Long Tail, and served Select to celebrants.) But getting Select into the hands and heads of this milieu is exactly why Anheuser-Busch tapped Flavorpill in the first place. "A company like Flavorpill is not a marketing company at all, but they have the right sort of friends" says Rob Walker, author of the "Consumed" column in The New York Times Magazine, who has written extensively about the changing dance between underground culture and the mass market. "Flavorpill has figured out they know some stuff that big companies want to know." And, given Flavorpill's newness and how it's unencumbered by traditional media mores, "it doesn't hurt Flavorpill's brand in any way." Two more deals like Select and Flavorpill practically doubles in size. And so Lewis, who just six years ago merely e-mailed pals about musical events, sounds like his company has a whole new raison d'?tre. For the new guys, it's not much to turn an editorial sensibility into one that works as advertising.

For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia